City commissioners voted 5-2 on Tuesday to take out a loan of up to $10 million to finance Largo's new community center.
TD Bank, which offered the lowest net cost, was awarded the loan, which is expected to cost the city about $1.75 million in interest over the loan's 10-year repayment terms.
After analyzing the offerings of several banks, Largo finance director Kim Adams selected TD Bank as the best deal for the city.
Some of the competing banks offered lower interest rates, but other terms increased their overall costs.
The interest rate for Regions Bank, for instance, was lower, but would cost more over 10 years because the TD Bank offer allowed the city to take out the loan incrementally as needed for construction, rather than in one lump sum.
Commissioner Curtis Holmes objected to the loan because he said he felt the city has more pressing needs. He also voted against the community center project when it was proposed.
"I find it a real difficult pill to swallow to go back to the taxpayers of this city and say, 'We're going to go out and borrow $10 million on an entertainment venue," Holmes said.
Commissioner Mary Gray Black voted against the loan because she said she thought it would be better not to use a loan to finance the project.
"I said I felt we should borrow the money internally and pay it back with interest to ourselves, Black said. "And I stand by that tonight."
Adams responded by saying the safest option in the long run was to use external funds.
"My preference as a professional is not to borrow internally for that long a period," Adams said. "While we are saving money if we are to do this today, in the long term, I cannot tell you we would save."
Dominick Tao can be reached at (727) 580-2951 or email@example.com